With an agreement among key farm bill negotiators finally in hand, the conference committee is expected to make swift work this week on the reauthorization of the five-year bill overseeing agriculture, conservation, energy and nutrition programs.

The committee will hold a formal conference meeting this evening, where they are expected to approve a new framework for funding and offsets for the bill that key House-Senate negotiators from the tax and agriculture panels agreed to late Friday.

Energy Harvest: Power From the Farm—An E&E Special Report

The new framework for the bill includes a $4 billion boost above the current baseline for conservation programs and $10.3 billion in new spending on nutrition.

Crop subsidies and reductions to a proposed disaster relief program took the brunt of the spending cuts to offset the new spending, lawmakers said.

The framework also includes a pared-down version of the Senate’s tax package that would roll back tax cuts for corn-based ethanol and give new tax breaks for the cellulosic ethanol and timber industries.

The leaders of the House and Senate Agriculture committees reached the agreement Friday after several days of intense closed-door negotiations in the Capitol. Lawmakers still have to work out some details of the $300 billion, five-year measure, but they said they expect a swift resolution of the conference this week.

“There were some tough spots, but we were able to get by all of that,” House Agriculture Chairman Collin Peterson (D-Minn.) said after meetings Friday. “Any member can offer any amendment [in the conference committee], but I don’t see a need for any votes—I think we’ve got this so it won’t require any of that.”

The agreement still must reach approval of the conference committee and the full House and Senate, as well as the White House. President Bush has held a hard line with the farm bill, threatening to veto it unless it reforms crop subsidies and avoid tax increases.

Bush administration officials were not present for the negotiations last week. A White House spokesman said they are reserving judgment until they can review the entire package.

“As we’ve said in the past, the president believes that a new farm bill should include important reforms, not raise taxes and be fiscally responsible,” said White House spokesman Scott Stanzel.

The leaders of the House and Senate tax panel agreed to rely on customs-users fees to offset much of the $10 billion in new spending for the bill. The fees, most of which would come from importers, do not classify as a tax and have not raised a red flag with the White House.

But other advocates for overhauling the farm bill are hopeful the White House will continue to press for more changes to the measure. Rep. Ron Kind (D-Wis.) said he hopes Bush “will stand firm in his commitment to a better bill.” Kind is one of the leaders of a group of House members pushing to throw out much of the current subsidy program.

“Negotiators managed to avoid every opportunity to reform wasteful, outdated subsidies while piling on additional layers of unnecessary spending,” said Kind. “It looks as though nothing has been done to address the waste and abuse that has been well documented over the last year.”
No limits for farmers

One of the outstanding issues for the bill is limitations on crop subsidies—a controversial area where reformers like Kind would like to see more change.

Lawmakers said they are still working out a deal on income limits for crop subsidy recipients. Peterson said it would likely lower the cap for people who make most of their income off the farm, but have no limitation for on-farm income.

“The people who are going to take a big hit in the bill are non-farmers,” said Peterson.

Advocates for farm bill reform want to place more stringent limits on how much money landowners can receive in federal subsidies—regardless of where their income comes from.

The Bush administration proposed barring anyone who makes more than $200,000 per year from farm supports.

The Senate’s version of the farm bill, approved in December, would stop payments to non-farmers who make more than $750,000 a year. It had no income caps for farmers. The House bill would cut off farm payments for millionaire farmers or non-farmers who make more than $500,000. Both prompted veto threats from Bush.
Corn gives way to cellulosic subsidies

The agreement also includes a package of tax incentives that totals close to $1.5 billion, according to members of the Finance Committee.

The package includes extensions and reductions of the ethanol tax credits and tariffs, said Sen. Charles Grassley (R-Iowa). The move is a step toward gradually transitioning the corn-ethanol industry to standing on its own. The package instead favors supports for cellulosic ethanol.

“It is a signal we are ready to shift to other less disruptive forms of ethanol production,” Senate Finance Chairman Max Baucus (D-Mont.) said of the package.

Corn-ethanol subsidies would see an almost 12 percent hit. The current 51-cent-a-gallon tax credit for corn-based ethanol would drop to 45 cents. In conjunction with that, it would also reduce the tariff on imported ethanol, Grassley said.

The winner in the tax package is cellulosic ethanol—made from corn stalks, woody plants or grasses. It would get a $1-per-gallon subsidy.

The move marks a significant shift for the farm-state lawmakers, who have been some of the biggest advocates for ethanol supports, and the booming grain and refinery industries that have come with them.

“This is a signal to the country that we’re starting to move away from corn to cellulose,” Peterson said.
Sodsaver exemptions

The agreement includes protections for virgin prairie, long-sought from environmental groups, but has loopholes to allow some states to ignore them.

Conservation advocates have been pushing for years for a sodsaver program to bar federal subsidies for farmers who plow up native prairie.

The Senate sodsaver language, favored by conservation groups, would block crop insurance and disaster payments for farmers who plant on native prairie. The House bill limits the crop insurance ineligibility to four years.

The conference agreement has an “amalgam” of the House and Senate sodsaver provisions, Senate Agriculture Chairman Tom Harkin (D-Iowa) said Friday. All of the prairie pothole states would have to comply, but Montana and North Dakota would only opt in at their governors’ discretion.

Sodsaver is intended to address what conservation groups say is a backward system in current farm policy. The 2002 farm bill offers landowners conservation payments to conserve grasslands, but also gives crop insurance and crop subsidies that encourage plowing them up.

The Government Accountability Office issued a report this fall calling federal subsidies an “important factor” in encouraging the conversion of millions of acres of grasslands to row crops. The United States lost almost 25 million acres of privately owned grasslands between 1982 and 2003, GAO said.
Conservation

The $4 billion increase for conservation trails the numbers negotiators had previously discussed, but still would give a significant boost to most farmland conservation programs.

Much of the conservation money would go to restore funding for programs that would otherwise expire under current law. The expiring Wetlands Reserve Program would get $1.3 billion above the 10-year baseline and the Grasslands Reserve Program would get $300 million.

The framework shifts almost $2.5 billion from the Conservation Reserve Program to other conservation programs—cutting down the Agriculture Department’s largest conservation program but infusing other working-lands programs with some of the money in its budget.

Lawmakers said it lowers the acreage cap for CRP to more closely reflect the reality of the program, which pays farmers to idle land.

The framework allots for 32 million acres in CRP. That total is less than the current limit of 39 million acres but still more land than most USDA officials expect to see in the program in the next several years. Enticed by high commodity prices, farmers have been taking some land out of the program, and USDA has held off on new open enrollments.

Other conservation programs would see a boost under the framework. The Environmental Quality Incentives Program would see a $2.4 billion increase over baseline levels, the Conservation Stewardship Program gets $1.1 billion, and the Farm and Ranch Land Protection Program gets $560 million. A new program for the Chesapeake Bay comes in at $372 million.

Are all biofuels equal in terms of their capacity to reduce greenhouse gas emissions relative to the use of gasoline? If not, what factors determine which biofuels have greater capacity to reduce greenhouse gas emissions? What is the most reliable method of measuring a biofuel’s effectiveness for reducing greenhouse gas emissions? What role does land conversion make in determining the effectiveness of biofuels in reducing greenhouse gas emissions? Which biofuels of the future are likely to result in maximal reductions in greenhouse gas emissions? How close are we to that future?

Dr. Daniel M. Kammen, Class of 1935 Distinguished Professor of Energy, Professor in the Energy and Resources Group Energy and Resources Group (ERG) , Professor of Public Policy in the Goldman School of Public Policy, Professor of Nuclear Engineering in the Department of Nuclear Engineering, and Co-Director, Berkeley Institute of the Environment, and Founding Director of the Renewable and Appropriate Energy Laboratory (RAEL), University of California, Berkeley, CA

Dr. G. David Tilman, Regents’ Professor and McKnight Presidential Chair in Ecology, University of Minnesota, St. Paul, MN

Program Summary

Biofuels: Threats and Opportunities

It is possible to make biofuels that reduce carbon emissions, but only if we ensure that they do not lead to additional land clearing.

When land is cleared for agriculture, carbon that is locked up in the plants and soil is released through burning and decomposition. The carbon is released as carbon dioxide, which is an important greenhouse gas, and causes further global warming.

Converting rainforests, peatlands, savannas, or grasslands to produce food crop–based biofuels in Brazil, Southeast Asia, and the United States creates a “biofuel carbon debt” by releasing 17 to 420 times more carbon dioxide than the annual greenhouse gas reductions that these biofuels would provide by displacing fossil fuels.

Depending on future biofuel production, the effects of this clearing could be significant for climate change: globally, there is almost three times as much carbon locked up in the plants and soils of the Earth as there is in the air and 20% of global carbon dioxide emissions come from land use change.

Global demand for food is expected to double in the next 50 years and is unlikely to be met entirely from yield increases, thus requiring significant land clearing. If existing cropland is insufficient to meet imminent food demands, then any dedicated biofuel crop production will necessarily create demand for additional cropland to be cleared.

Several forms of biofuels do not cause land clearing, including biofuels made from algae, from waste biomass, or from biomass grown on degraded and abandoned agricultural lands planted with perennials.

Previous studies have found that substituting biofuels for gasoline will reduce greenhouse gasses because growing the crops for biofuels sequesters takes carbon out of the air that burning only puts back, while gasoline takes carbon out of the ground and puts it into the air. These analyses have typically not taken into consideration carbon emissions that result from farmers worldwide converting forest or grassland to produce biofuels, or that result from farmers worldwide responding to higher prices and converting forest and grassland into new cropland to replace the grain (or cropland) diverted to biofuels. Our revised analysis suggests that greenhouse gas emissions from the land use changes described above, for most biofuels that use productive land, are likely to substantially increase over the next 30 years. Even advanced biofuels from biomass, if produced on good cropland, could have adverse greenhouse gas effects. At the same time, diverting productive land raises crop prices and reduces consumption among the 2.8 billion people who live on less than $2 per day.

Simply avoiding biofuels produced from new land conversion – as proposed by a draft European Union law – does not avoid these global warming emissions because the world’s farmers will replace existing crops or cropland used for biofuels by expanding into other lands. The key to avoiding greenhouse gas emissions and hunger from land use change is to use feedstocks that do not divert the existing productive capacity of land – whether that production stores carbon (as in forest and grassland) or generates food or wood products. Waste products, including municipal and slash forest waste from private lands, agricultural residues and cover crops provide promising opportunities. There may also be opportunities to use highly unproductive grasslands where biomass crops can be grown productively, but those opportunities must be explored carefully.

Biofuels and a Low-Carbon Economy

The low-carbon fuel standard is a concept and legal requirement in California and an expanding number of states that targets the amount of greenhouse gases produced per unit of energy delivered to the vehicle, or carbon intensity. In January 2007, California Gov. Arnold Schwarzenegger signed Executive Order S-1-07, which called for a 10-percent reduction in the carbon intensity of his state’s transportation fuels by 2020. A research team in which Dr. Kammen participated developed a technical analysis of low-carbon fuels that could be used to meet that mandate. That analysis employs a life-cycle, “cradle to grave” analysis of different fuel types, taking into consideration the ecological footprint of all activities included in the production, transport, storage, and use of the fuel.

Under a low-carbon fuel standard, fuel providers would track the “global warming intensity” (GWI) of their products and express it as a standardized unit of measure—the amount of carbon dioxide equivalent per amount of fuel delivered to the vehicle (gCO2e/MJ). This value measures vehicle emissions as well as other trade-offs, such as land-use changes that may result from biofuel production. For example, an analysis of ethanol shows that not all biofuels are created equal. While ethanol derived from corn but distilled in a coal-powered refinery is in fact worse on average than gasoline, some cellulosic-based biofuels – largely those with little or no impact on agricultural or pristine lands have the potential for a dramatically lower GWI.

Equipped with detailed measurements that relate directly to the objectives of a low-carbon fuel standard, policy makers are in a position to set standards for a state or nation, and then regulate the value down over time. The standard applies to the mix of fuels sold in a region, so aggressively pursuing cleaner fuels permits some percentage of more traditional, dirtier fuels to remain, a flexibility that can enhance the ability to introduce and enforce a new standard.

The most important conclusions from this analysis are that biofuels can play a role in sustainable energy future, but the opportunities for truly low-carbon biofuels may be far more limited than initially thought. Second, a low-carbon economy requires a holistic approach to energy sources – both clean supply options and demand management – where consistent metrics for actual carbon emissions and impacts are utilized to evaluate options. Third, land-use impacts of biofuel choices have global, not just local, impact, and a wider range of options, including, plug-in hybrid vehicles, dramatically improved land-use practices including sprawl management and curtailment, and greatly increased and improved public transport all have major roles to play.

Biofuels and Greenhouse Gas Emissions: A Better Path Forward

The recent controversy over biofuels notwithstanding, the US has the potential to meet the legislated 21 billion gallon biofuel goal with biofuels that, on average, exceed the targeted reduction in greenhouse gas release, but only if feedstocks are produced properly and biofuel facilities meet their energy demands with biomass.

A diversity of alternative feedstocks can offer great GHG benefits. The largest GHG benefits will come from dedicated perennial crops grown with low inputs of fertilizer on degraded lands, and especially from those crops that increase carbon storage in soil (e.g., switchgrass, mixed species prairie, and Miscanthus). These may offer 100% or perhaps greater reductions in GHG relative to gasoline. Agricultural and forestry residues, and dedicated woody crops, including hybrid poplar and traditional pulp-like operations, should achieve 50% GHG reductions.

In contrast, if biofuel production leads to direct or indirect land clearing, the resultant carbon debt can negate for decades or longer any greenhouse gas benefits a biofuel could otherwise provide. Current legislation, which is outcome based, has anticipated this problem by mandating GHG standards for current and next generation biofuels.

Biographies

Dr. Joseph E. Fargione is the Regional Science Director for The Nature Conservancy’s Central US Region. He received his doctorate in Ecology from the University of Minnesota in 2004. Prior to the joining The Nature Conservancy, he held positions as Assistant Research Faculty at the University of New Mexico (Biology Department), Assistant Professor at Purdue University (Departments of Biology and Forestry and Natural Resources), and Research Associate at the University of Minnesota (Departments of Applied Economics and Ecology, Evolution, and Behavior).

His work has focused on the benefits of biodiversity and the causes and consequences of its loss. Most recently, he has studied the effect of increasing demand for biofuels on land use, wildlife, and carbon emissions. He has authored 18 papers published in leading scientific journals, including Science, Proceedings of the National Academy of Sciences, Proceedings of the Royal Society, Ecology, and Ecology Letters, and he was a coordinating lead author for the Millennium Ecosystem Assessment chapter titled “Biodiversity and the regulation of ecosystem services.” His recent paper in Science, “Land clearing and the biofuel carbon debt” was covered in many national media outlets, including the New York Times, Washington Post, Wall Street Journal, National Public Radio, NBC Nightly News, and Time Magazine.

Timothy Searchinger is a Visiting Scholar and Lecturer in Public and International Affairs at Princeton University’s Woodrow Wilson School. He is also a Transatlantic Fellow of the German Marshall Fund of the United States, and a Senior Fellow at the Georgetown Environmental Law and Policy Institute. Trained as a lawyer, Dr. Searchinger now works primarily on interdisciplinary environmental issues related to agriculture.

Timothy Searchinger previously worked at the Environmental Defense Fund, where he co-founded the Center for Conservation Incentives, and supervised work on agricultural incentive and wetland protection programs. He was also a deputy General Counsel to Governor Robert P. Casey of Pennsylvania and a law clerk to Judge Edward R. Becker of the United States Court of Appeals for the Third Circuit. He is a graduate, summa cum laude, of Amherst College and holds a J.D. from Yale Law School where he was Senior Editor of the Yale Law Journal.

Timothy Searchinger first proposed the Conservation Reserve Enhancement Program to USDA and worked closely with state officials to develop programs that have now restored one million acres of riparian buffers and wetlands to protect important rivers and bays. Searchinger received a National Wetlands Protection Award from the Environmental Protection Agency in 1992 for a book about the functions of seasonal wetlands of which he was principal author. His most recent writings focus on the greenhouse gas emissions from biofuels, and agricultural conservation strategies to clean-up nutrient runoff. He is also presently writing a book on the effects of agriculture on the environment and ways to reduce them.

Dr. Daniel M. Kammen, Class of 1935 Distinguished Professor in the Energy and Resources Group (ERG), in the Goldman School of Public Policy and in the Department of Nuclear Engineering at the University of California, Berkeley. He is also the founding Director of the Renewable and Appropriate Energy Laboratory (RAEL) and Co-Director of the Berkeley Institute of the Environment.

Previously in his career, Dr. Kammen was an Assistant Professor of Public and International Affairs at Princeton University, and also played a key role in developing the interdisciplinary Science, Technology, and Environmental Policy (STEP) Program at Princeton as STEP Chair from 1997 – 1999. In July of 1998 Kammen joined ERG as an Associate Professor of Energy and Society.

Dr. Kammen received his undergraduate degree in physics from Cornell University (1984), and his masters and doctorate in physics from Harvard University (1986 & 1988) for work on theoretical solid state physics and computational biophysics. First at Caltech and then as a Lecturer in Physics and in the Kennedy School of Government at Harvard, Dr. Kammen developed a number of projects focused on renewable energy technologies and environmental resource management.

Dr. Kammen’s research interests include: the science, engineering, and policy of renewable energy systems; health and environmental impacts of energy generation and use; rural resource management, including issues of gender and ethnicity; international R&D policy, climate change; and energy forecasting and risk analysis. He is the author of over 200 peer-reviewed journal publications, a book on environmental, technological, and health risks, and numerous reports on renewable energy and development. He has also been a lead author for the Intergovernmental Panel on Climate Change that shared the 2007 Nobel Peace Prize.

Dr. G. David Tilman is Regents’ Professor and McKnight Presidential Chair in Ecology at the University of Minnesota. He is an elected member of the American Academy of Arts and Sciences and the National Academy of Sciences, and has served on editorial boards of nine scholarly journals, including Science. He serves on the Advisory Board for the Max Plank Institute for Biogeochemistry in Jena, Germany. He has received the Ecological Society of America’s Cooper Award and its MacArthur Award, the Botanical Society of America’s Centennial Award, the Princeton Environmental Prize and was named a J. S. Guggenheim Fellow. He has written two books, edited three books, and published more than 200 papers in the peer-reviewed literature, including more than 30 papers in Science, Nature and the Proceedings of the National Academy of Sciences USA. The Institute for Scientific Information recently designated him as the world’s most highly cited environmental scientist of the decade.

Dr. Tilman’s recent research explores how managed and natural ecosystems can sustainably meet human needs for food, energy and ecosystem services. A long-term focus of his research is on the causes, consequence and conservation of biological diversity, including using biodiversity as a tool for biofuel production and climate stabilization through carbon sequestration. His work on renewable energy examines the full environmental, energetic and economic costs and benefits of alternative biofuels and modes of their production.

The agency’s fire suppression efforts would get a $148 million increase – to just under $1 billion – under the plan, a total based on the 10-year average of fire suppression costs. Last year, the Forest Service spent $1.4 billion fighting fires, the National Interagency Fire Center said.

The Bush administration budget proposal would provide $297 million for projects to reduce hazardous fuels, down from $310 million in fiscal 2008. Fire preparedness would fall to $588 million from $666 million in fiscal 2008.

Several lawmakers last week slammed the proposed budget, saying it overemphasizes firefighting at the cost of fire prevention and forest restoration. . .
Kimbell will be the sole witness before House appropriators on Wednesday. The chairman of the Interior subcommittee, Rep. Norm Dicks (D-Wash.), was also highly critical of the agency’s proposed budget cuts.

The Forest Legacy Program, which helps conserve threatened private forests, would be reduced $40 million, to $12.5 million. The budget would also eliminate $40 million that Dicks placed in the fiscal 2008 budget for road decommissioning and reclamation.

“The Forest Service has just gotten crushed,” Dicks said in an interview last week. “It’s cut 16 percent … and they don’t have enough money over there to do the trail work, the road work, the forestry with the states, the conservation.”

Business meeting to consider original bills entitled, “American Infrastructure Investment and Improvement Act”, “The Habitat and Land Conservation Act of 2007”, and to review and make recommendations on proposed legislation implementing the U.S.-Peru Trade Promotion Agreement